Like energy bill, stimulus package misses the target

The economic stimulus initiative pushing its way through the US Congress has much in common with last year's energy bill. It's superficial and insufficient, probably harmful.

The Energy Independence and Security Act of 2007 hiked the mandate for renewable vehicle fuel and raised fuel-economy standards for new cars and trucks.

The worst part of the new law isn't that it will raise vehicle prices; there's at least compensation in the hope for improved mileage. The worst part isn't even that an elevated ethanol mandate will boost prices of food and fuel, aggravate air pollution in some areas, and sap federal and state treasuries without delivering on promises about extending energy supply.

The worst part of the new energy law is how the US has heaved off its free-market moorings, resorted to government remedies with demonstrable flaws, and congratulated itself for acting on energy without meaningfully and affordably enhancing supply.

The stimulus package looks like smoke from the same fire.

At this writing, the Senate was deliberating legislation passed by the House that would inject $160 billion into the stuttering US economy with tax rebates and temporary tax cuts.

That's $160 billion in a $14 trillion economy.

If a sudden slug of dollars really can turn the US economy away from jeopardy, timing is surely important.

Yet the president and lawmakers seem to care only about paying out the cash as quickly as possible. By the time the checks arrive, the economy could look much different—maybe, for example, more vulnerable to inflation—than it does now.

With the federal budget in deficit, the dollars will represent debt, not new wealth. When all is said and done, the deficit will linger, fuel and food prices still will be high, and individuals and businesses will remain fretful about a huge tax increase in 2010 unless Congress makes permanent the rate cuts of 2001 and 2003.

Like the energy bill, the stimulus package represents dangerous tokenism.

It's the product of a government that should quit posing as the solution to all economic problems and start addressing the problems its own mistakes have caused.